Case: 1:23-cv-02701 Document #: 28 Filed: 05/31/23 Page 1 of 10 PageID #:3009

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SOCLEAN, INC., )
)
Plaintiff, ) No. 23-cv-2701
)
v. ) Judge Martha M. Pacold
) Magistrate Judge M. David Weisman
3-C DIGITAL TECHNIQUE STORE, et al., )
)
Defendants. )

CHOICEONE'S OPPOSED MOTION TO RECOVER SOCLEAN'S TRO BOND

Defendant Choice One Medical d/b/a CPAP Life ("ChoiceOne") moves pursuant to Federal

Rule of Civil Procedure ("Rule") 65(c) to recover the bond posted by SoClean, Inc. ("SoClean")

pursuant to its temporary restraining order, and in support, states as follows:

Relevant Facts

1. ChoiceOne is a global manufacturer and distributor of medical accessories,

headquartered in Toronto, Canada, with a focus on products relating to respiration, sleep, and

disinfectants. ChoiceOne sells products on Amazon's website, doing business as CPAP Life.

2. SoClean allegedly engages in the business of manufacturing, distributing, and

retailing specialized consumer products, including a product having U.S. Patent No. 10,953,121,

which is described as an "apparatus and method for sanitizing a continuous positive airway

pressure (CPAP) device" (the "SoClean Patented Product"). See ECF No. 1, Exhibit 1. The

SoClean Patented Product purportedly "sanitizes all parts of the CPAP device, including the inner

areas of the hose, reservoir and face mask most prone for bacteria build up." Id.

3. On May 1, 2023, SoClean filed suit against ChoiceOne and 291 other defendants,

identified by pseudonym as "Does 1-292," alleging that defendants made up a "cabal of foreign

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counterfeiters" who were "working in active concert to knowingly and willfully manufacture,

import, distribute, offer for sale, and sell" products that infringed the SoClean Patented Product.

ECF No. 1, at ¶¶ 1, 5.

4. ChoiceOne, however, has never manufactured, distributed, or sold a product that

even arguably infringes the SoClean Patented Product. See Declaration of Michael Greige,

attached here as Exhibit A, ¶ 6.

5. In fact, the product that formed the basis of SoClean's lawsuit against ChoiceOne—

identified by hyperlink in Exhibit B to SoClean's Complaint and Schedule A to this Court's May

2, 2023 order1—is a mat and dustcover for CPAP machines described and identified at the

hyperlink SoClean provided as follows (id.):

Roll over image to zoom in

Purdoux - Dust Cover and Protector Mat - Anti-Slip mat Keeps Your CPAP Machine
in Place While The Cover Shields it from dust!

Brand: Purdoux
4.5 4.5 out of 5 stars 71 ratings

1
The hyperlink SoClean included in its table relating to ChoiceOne's product can be found in Row
38 of SoClean's table, available here: https://www.amazon.com/Purdoux-Protector-Anti-Slip-
Machine-Shields/dp/B09MDQHY8M/ref=sr_1_138

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| 3 answered questions

Currently unavailable.
We don't know when or if this item will be back in stock.

6. The SoClean Patented Product is a patented cleaning device, while ChoiceOne's

accused product is a CPAP machine carrying bag and mat. Given the obvious differences between

the SoClean Patented Product and the ChoiceOne product, above, there was no basis for SoClean's

lawsuit against ChoiceOne.

7. Nonetheless, on May 2, 2023, SoClean obtained an ex parte temporary restraining

order enjoining ChoiceOne and the 291 other defendants from infringing SoClean's patent, or

transferring or disposing of any money or assets in defendants' financial accounts. ECF No. 12

(the "TRO"), ¶ 1–2. In addition, the TRO required Amazon.com, Inc., among other third party

providers, "within seven (7) calendar days after receipt of" notice from SoClean, to (i) "disable

and cease displaying any advertisements used by or associated with Defendants in connection with

the sale of counterfeit and infringing goods using the SoClean Patent"; and (ii) "restrain and enjoin"

any such Defendant "accounts or funds from transferring or disposing of any money or other of

Defendants' assets until further ordered by the Court." Id. ¶ 5. The Court required SoClean to post

a bond of $10,000 "for the payment of such damages as any person may be entitled to recover as

a result of a wrongful restraint hereunder." Id. ¶ 10.

8. SoClean sent or otherwise notified Amazon.com, Inc. of the existence of the TRO

against ChoiceOne, and as a result, on May 9, 2023, Amazon prevented the sale on its website of

the ChoiceOne, above-pictured product. Greige Decl., ¶ 5. In addition, Amazon froze all funds due

to ChoiceOne from all sales made through Amazon's website, including sales of unrelated

products. Id.

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9. The TRO remained in effect for 14 days, and was originally set to expire on May

16, 2023. Id. ¶ 12. On May 8, 2023, SoClean moved to extend the TRO until May 25, 2023. ECF

No. 14. The Court granted SoClean's motion the following day. ECF No. 15.

10. ChoiceOne first became aware of SoClean's lawsuit against it on May 24, 2023,

when the CEO of ChoiceOne, Michael Greige, received an email that was forwarded to him by

one of ChoiceOne's employees providing notice that the TRO had been entered against ChoiceOne.

Greige Decl., ¶ 3. The original email providing such notice was sent by SoClean to

"info@choiceonemedical.com," which is not a location where ChoiceOne receives legal mail. Id.

Mr. Greige immediately forwarded the email to his legal counsel in Canada, who connected

ChoiceOne with counsel in Chicago, Illinois. Id. ¶ 4. The next day, on May 25, 2023, ChoiceOne

retained counsel in Chicago to represent its interests in this lawsuit. Id.

11. On Friday, May 26, 2023, ChoiceOne's counsel contacted SoClean's counsel to

demand withdrawal of the TRO and dismissal of SoClean's claims against ChoiceOne. Id. ¶ 8.

SoClean's counsel agreed and filed a motion to amend Schedule A to remove ChoiceOne as a

defendant, which ended SoClean's claims and the applicability of the injunction against

ChoiceOne. ECF Nos. 23–24, 27.

12. According to counsel for SoClean, a notice was submitted on May 26 to Amazon

requesting that it release ChoiceOne's account so it can sell its products. Id. ¶ 9. Counsel for

ChoiceOne has requested that a copy of this notice be provided, but SoClean has not responded to

the request. As of May 30, 2023, ChoiceOne's account with Amazon remains frozen, and we

believe it could take weeks for Amazon to unfreeze ChoiceOne's account. Id. ¶ 9–10.

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Argument

A. ChoiceOne should recover SoClean's bond because SoClean wrongfully

obtained the TRO against ChoiceOne

13. A temporary restraining order is an "extraordinary and drastic remedy." Tranchita

v. Callahan, 511 F. Supp. 3d 850, 864 (N.D. Ill. 2021). Rule 65(c) provides that a plaintiff

obtaining such an order may be required by the court to post a bond providing "security in an

amount that the court considers proper to pay the costs and damages sustained by any party found

to have been wrongfully enjoined or restrained." Fed. R. Civ. P. 65(c). A "prevailing party" is

"entitled to damages on the injunction bond unless there is good reason for not requiring the

plaintiff to pay in the particular case." Coyne-Delaney Co., Inc. v. Cap. Dev. Bd. of State of Ill.,

717 F.2d 385, 391 (7th Cir. 1983); see also Triumph v. Ward, 2011 WL 6754044, at *4 (N.D Ill.

Dec. 2011) (recognizing that in the Seventh Circuit, "there is a presumption in favor of awarding

injunction bond damages to a 'prevailing party' that is rebutted only by a showing of 'good reason'

not to award damages.").

14. "It is not a sufficient reason for denying costs or damages on an injunction bond

that the suit" was "brought in good faith." Coyne Delaney Co., Inc., 717 F.2d at 392. "That would

be sufficient only if the presumption were against rather than in favor of awarding costs and

damages on the bond to the prevailing party, as it would be if the issue were attorney's fees under

the American rule, which in the absence of bad faith leaves a party to bear his own attorney's fees."

Id. "The award of damages on the bond is not punitive but compensatory." Id

15. However here, it is apparent that the suit was not brought in good faith. When an

attorney files a complaint in federal court, it "certifies that to the best of the person’s knowledge,

information and belief, formed after an inquiry reasonable under the circumstances," "the factual

contentions have evidentiary support." Fed. R. Civ. P. 11(b)(2).

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16. In contrast to the investigation required by Rule 11, here, the only explanation for

the filing of this lawsuit against ChoiceOne is that plaintiff’s counsel performed no investigation

at all. The SoClean Patented Product is for cleaning and sanitizing CPAP machines and their

component parts. The accused product sold by ChoiceOne is a carrying bag and mat for CPAP

machines. As demonstrated in the photograph in Paragraph 5, above, it is immediately apparent to

anyone who follows the link provided in SoClean's table (Exhibit B and Schedule A, at Row 38)

that ChoiceOne does not sell a product that even arguably infringes the SoClean Patented Product.

Rather, SoClean failed to review the webpage it provided in its own table, and wrongfully and in

bad faith caught ChoiceOne in its dragnet. Accordingly, the TRO obtained by SoClean against

ChoiceOne was undoubtedly improper.

17. SoClean's immediate agreement to amend its Complaint to dismiss its claim

against ChoiceOne conclusively demonstrates that ChoiceOne was the "prevailing party" here. See

ECF No. 23. The same agreement further supports the wrongful nature of the TRO in the first

place. SoClean's dismissal of its claim against ChoiceOne unfortunately did not fully address the

harm that SoClean caused by obtaining the TRO. ChoiceOne suffered damages due to being

improperly prevented from selling its products on Amazon.com, which SoClean should be

required to remediate.

B. ChoiceOne suffered damages in excess of $10,000, and therefore should be

paid the full amount of SoClean's bond

18. ChoiceOne suffered over $10,000 in damages as a result of SoClean's improper

injunction against it. While SoClean's counsel represented that it submitted a notice to Amazon on

May 26, 2023 to release ChoiceOne's account so it can sell its product, as of May 30, 2023,

ChoiceOne's account with Amazon remained frozen. Greige Decl., ¶ 9. It is our understanding that

it could take weeks, possibly months, for Amazon's process to unfreeze ChoiceOne's account. Id.

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¶ 10. While ChoiceOne's account is frozen, ChoiceOne suffers two elements of damages: (1) lost

sales; and (2) reduction in ChoiceOne's Amazon ranking, which suppresses future sales. Id. ¶ 11.

19. At the time that SoClean erroneously had ChoiceOne’s account frozen on Amazon,

ChoiceOne’s sales had been steadily increasing. Id. ¶ 12. The three month trailing average through

April 30, 2023, produced $11,197.20 in sales, or $125.81 per day, which was 70% higher than

ChoiceOne’s sales from the three month period one year earlier. Id. Indeed, this trend would have

continued had SoClean not interrupted ChoiceOne’s sales. Id.

20. Assuming ChoiceOne would have continued to earn $125.81 per day from sales of

the accused product, ChoiceOne has already lost sales of $2,642.01 that would have occurred

between May 9, 2023 (the date Amazon froze ChoiceOne's account) and May 30, 2023 (the last

full day before this motion was filed).

21. ChoiceOne believes that it will take at least four weeks for Amazon to unfreeze its

account after receiving the notice from SoClean, leaving ChoiceOne’s account frozen for 45 days

in total. Id. ¶ 13. Accordingly, the minimum sales lost by ChoiceOne, assuming no growth in sales

at all, would be $5,661.45 over that time. Id.

22. Moreover, ChoiceOne’s sales are directly related to its Amazon ranking. Id. ¶ 14.

While SoClean’s erroneous injunction was in place, ChoiceOne’s ranking dropped from 83,901 to

273,585, as of May 26, 2023. Id. Indeed, ChoiceOne’s ranking on Amazon will continue to drop

precipitously while its account is frozen. Id.

23. In order to undo the damage caused by this decline, ChoiceOne projects that it will

have to spend $10,000 in advertising, and it will likely take six to nine months for ChoiceOne’s

ranking to return to where it was before SoClean shut down ChoiceOne’s Amazon account. Id. ¶

15. Throughout that time period, ChoiceOne’s sales will be suppressed from where it would have

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been had SoClean not sought and obtained its erroneous injunction against an innocent party. Id.

¶ 16.

24. Accordingly, between lost sales and additional advertising expenditures,

ChoiceOne will suffer well in excess of $10,000 as a result of the mistaken TRO. Id. ¶ 18.

25. In its TRO, the Court required SoClean to post a $10,000 bond for payment of

damages to any person as a result of "wrongful restraint hereunder." ECF No. 12, ¶ 10. ChoiceOne

has suffered damages in excess of SoClean's bond, so the full amount of the bond should be ordered

to be paid to ChoiceOne.

Conference

26. On May 31, 2023, counsel for ChoiceOne contacted counsel for SoClean regarding

the relief requested in this motion, which SoClean opposes.

Wherefore, Choice One Medical d/b/a CPAP Life respectfully requests that the Court order

that the full amount of the bond be paid to ChoiceOne, and for any other and further relief that this

Court deems just and necessary.

Dated: May 31, 2023

Choice One Medical d/b/a CPAP Life

By: /s/ Joseph L. Hoolihan

One of Its Attorneys

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A. Colin Wexler
Joseph L. Hoolihan
GOLDBERG KOHN LTD.
55 East Monroe Street, #3300
Chicago, Illinois 60603
(312) 201-4000
colin.wexler@goldbergkohn.com
joseph.hoolihan@goldbergkohn.com

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CERTIFICATE OF SERVICE

The undersigned, an attorney, certifies that on May 31, 2023, he caused a copy of the

foregoing CHOICEONE'S MOTION TO RECOVER SOCLEAN'S TRO BOND, to be filed

on the Court's CM/ECF system, which will provide notice to all parties of record.

/s/ Joseph L. Hoolihan

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